Friday, July 13, 2012

China Construction Bank purchased

This afternoon I added a few more shares in China Construction Bank (HK:939) to the portfolio. China's banking sector has been hit hard over recent months by concerns over the quality of their loan books, policy based initiatives which have the effect of compressing net interest margins and, in CCB's case, one specific bad loan which has received a lot of media coverage.

In the belief that these concerns are overdone, I added a few more shares to the portfolio this afternoon.

3 comments:

Your recent purchase and stock pick have been quite successful. Most of your purchases been up 10 percent or more. Would you please share with us how you select stock, what are the key criterias you value, and how to choose the right time?

Apologies for the delay in responding - I took a break from the bloggosphere for a couple of weeks while travelling.

J-D - no particular reason other than that I am more familiar with CCB and didn't have to spend as much time thinking about the CCB as I would have with ABC or ICBC

Annonymous - thanks but I beg to differ. While the portfolio as a whole is comfortably ahead, there are a few stocks which have been loss makers (Sino Oil & Gas, Vodone and Xtep) - the main saving grace is that I have put more money into the more successful investments than the losers. As for criteria, I tend to favour companies with strong balance sheets, a reasonable track record, at least some dividend yield and an unqualified audit report from a big four auditor. I also like a story - a reason why I think the stock will be a long term store of value.

As I get nearer retirement, I have increasingly gravitated away from smaller companies and companies that have yet to generate meaningful profits.